🧵1/Ω #Tether's claims of $1.5 bn profit in 2023-Q1 means they must be investment geniuses.
Assume that every asset category is as they claim it was on 2023-03-31: $68.8 bn investments, $480 mm cash). If the cash equivs are 100% short dated t-bils their income would be $1.15 bn
🧵2/Ω
This is even if you assume they rushed out and bought $14 bn worth of treasuries on the first day of the quarter to get them from $39bn to $53bn, which they didn't. They didn't even have $68bn TOTAL at the start of the quarter.
🧵3/Ω
In fact at the start of the quarter (and for much of the rest of it) they had closer to $50bn in interest earning securities.
Meaning in the real world, they should have earned around $1 billion.
🧵4/Ω
That leaves the rest of their portfolio - the part that started at $12bn & ended at $12.5 billion - to make up $350-500 million.
Earning $350 million in one quarter on a $12 billion principal means you are earning roughly 12%.
🧵5/Ω
The interest income numbers were calculated using the fed's daily published 4 week treasury bill rate. And this is the most charitable explanation.
Something smells.
🧵6/Ω
Now sure, you could note that gold is up ~8% for the quarter and silver is up ~4%, which would yield APYs a bit above 4x those numbers. But Tether has allegedly had this gold for a while.
Maybe they timed the market perfectly?
🧵7/Ω
Does Paolo Sardino strike you as an investment genius who can time markets perfectly?
Or maybe, just maybe, is it the case that Tether bought bitcoins, then manipulated the price upwards to get these profits?
🧵8/Ω
It is also interesting to do a side by side comparison of Tether's assets at the end of 2022-Q4 and 2023-Q1 and see what they ungrouped.
- Corporate Bonds & Precious Metals turned out to be almost all gold.
- Other Investments turned out to be mostly bitcoin.
🧵9/Ω
"Secured loans" actually went DOWN ~$500mm. So either someone paid them back or... the loans went bad and Tether seized the collateral.
What kind of collateral do you think people who borrow $USDT from #Tether put up?
Here's a hint:
🧵10/Ω
What if #Tether had made fiat loans that went bad in 2023-Q4? I know that sounds absurd given that it was such a prosperous, uneventful quarter in crypto, but bear with me.
🧵11/Ω
This all adds up to a scenario where, if we take #Tether at their word (lol) they are holding quite a lot of $USDT's backing in highly speculative, risky investments in godl, bitcoins, and sketchy loans.
🧵1/Ω
It’s that time again. Gather round, children, for a thread about the closing arguments in the trial of Sam Bankman-Fried. #FTXTrial #FTXScam
Ω👇Ω
🧵2/Ω
The govt’s case revolves around a few things but fundamentally it’s about risks that were not disclosed to customers/investors.
According to the govt not only were these risks not disclosed SBF took steps to conceal them. Which is, you know, a crime
Text from my 📌 twt 👇
🧵3/Ω
It’s conceded by everyone including SBF himself that there were undisclosed risks so the question becomes one of intent. The govt’s argument is that the many steps taken to conceal the risks reveal ill intent. SBF's argument is basically "being irresponsible is not illegal"
🧵1/Ω
Thoughts from SBF’s 2nd day of cross examination:
Today went very, very badly for Mr. Bankman-Fried but it was still kind of a shame the jury didn’t get to witness the absolute train wreck of his first attempt especially this part:
🧵2/Ω
Things got off to a rough start when SBF tried to say that the million and one times he claimed that Alameda was just like any other FTX customer in every way he secretly was communicating that “every way” meant “one way”: Alameda didn’t front run FTX's customers.
🧵3/Ω
Cue AUSA bringing up approximately a bazillion tweets, emails, slack messages, etc. where SBF said Alameda was just like any other customer followed by the question “does it say ‘in terms of frontrunning customers’ here?”
1. I never imagined it would be so grimly satisfying to watch a man hang himself before my eyes. The only disappointing part was that today wasn’t in front of the jury.
🧵2/Ω
SBF’s “my view from the perspective of the data I had available to me at the time” and “I’ll try to answer the question I think yr asking”¹ schtick did not play well with the judge.
¹ he actually said this, after which the prosecutor said “you didn’t answer my question".
🧵3/Ω
His testimony today was about whether he would be able to use the “but my lawyer said it was OK” defense in front of the jury. Let me summarize how it went:
🧵1/Ω
Things I Learned From Caroline Ellison's Testimony That CoinDesk Has Declined to Mention, a Thread:
1. The billion dollars that SBF had to bribe Chinese officials to give back was held on Huobi and OKX.
🧵2/Ω
That bribe was for $150 million.
🧵3/Ω
Multiple people at FTX/Alameda had family ties to the Chinese government. One of those people thought the bribe was a bad idea and quit shortly thereafter. The other one was the guy who suggested the bribe.
🚨Ω🚨
Pumping my bags: another issue of #TheCryptocalypseChronicles is out on The Blogging Site That Shall Not Be Named concerning the actions of one #AxosFinancial AKA "#Binance's new US bank".
Link in bio because Elmo is pathetic and demonetizes links to That Other Site. $AX
🧵2/Ω
Perhaps unsurprisingly Axos Financial / $AX appears in the list of #FTX creditors.
🧵3/Ω
Also looks like the infamous #ReggieFowler, Crypto Capital Corp's main money launderer, invested $1.3 million with $AX according to court documents filed by #Tether / #Bitfinex begging for their money back.
Also $5 million to something related to Wacky Cathie's $ARKK? lol.
🧐 Just stumbled on this "FIAT INTEGRATION AND REVOLVING LOAN AGREEMENT DATED 10/16/2020" from #iFinex in the list of #FTX's assets from a few days ago.
🧵2/Ω
If you think through what that means... given that it appears in the FTX list of assets it appears that Tether had an open line of credit where they could borrow money from FTX?
1. What assets were they borrowing? 2. Why does a stablecoin issuer need to borrow anything?
🧵3/Ω
This might explain it... (h/t @ParrotCapital)